Everything changed when the Fifth Circuit slammed the door on the SEC. If you’ve been following the saga of the Private Fund Adviser Rules, you know it’s been a rollercoaster of high-stakes legal drama and compliance headaches. Honestly, the industry was bracing for a total overhaul—quarterly statements, mandatory audits, and a strict ban on "side letters" that gave big fish better exit terms than the rest of the pond. Then, in June 2024, a three-judge panel basically told the SEC they didn't have the legal legs to stand on.
The court vacated the rules in their entirety. Gone.
But here is the thing most people miss: just because those specific rules died doesn't mean the SEC went home. They didn't. In fact, if you look at the SEC private funds news coming out of early 2026, the agency has shifted its strategy from broad, sweeping mandates to a "death by a thousand cuts" approach through examinations and enforcement.
The Ghost of the Private Fund Rules
The Fifth Circuit’s decision in National Association of Fund Managers v. SEC was a massive blow to Chairman Gary Gensler’s agenda. The court ruled that the SEC exceeded its authority under the Dodd-Frank Act. Specifically, the judges argued that the "investors" the SEC is supposed to protect are retail customers—everyday people with 401(k)s—not the sophisticated institutional players who dump millions into private equity or hedge funds.
It was a victory for the industry. You’ve likely heard fund managers breathing a sigh of relief. No more $5.4 billion compliance bill, right?
Well, kinda.
The SEC hasn't stopped caring about preferential treatment or hidden fees. They just can't use the vacated rules to punish you. Instead, they are leaning heavily on the Marketing Rule and the existing Fiduciary Duty standards. If you tell an investor they’re getting the "best" terms but you’ve secretly given a sovereign wealth fund a 50% discount on management fees without disclosing it, the SEC will still come for you. They’ll just call it "fraudulent disclosure" rather than a violation of the now-defunct Private Fund Rules.
Form PF: The Reporting Headache That Won't Die
While the court killed the "transparency" rules, they didn't touch the reporting requirements. SEC private funds news lately has been dominated by the constant shifting of the Form PF compliance dates.
As of January 2026, the compliance date for the most recent Form PF amendments has been pushed yet again to October 1, 2026. This is the third extension. Why the delay? Because the new leadership at the SEC—including Chairman Paul Atkins—is under pressure to "right-size" these requirements.
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- Large hedge fund advisers are still on the hook for quarterly filings.
- Private equity managers are facing new "event-based" reporting, where they have to tell the SEC within 60 days if something goes sideways, like a GP removal or a fund liquidation.
- The agency is currently debating whether to raise the reporting thresholds so smaller shops don't have to deal with the paperwork nightmare.
The goal for 2026 is clearly a move toward "Capital Formation" rather than just "Regulation." The SEC is looking at ways to make it easier for private companies to raise money, which might actually mean less red tape for some of you.
What’s Actually Happening in 2026 Exams
If you're managing a fund, your biggest threat isn't a new law; it's the 2026 Exam Priorities. The SEC’s Division of Examinations has been very clear about what they are looking for this year. They are obsessed with AI.
If you claim to use "proprietary AI algorithms" to pick winners, you better have the receipts. The SEC is actively hunting for "AI washing"—firms that exaggerate their tech capabilities to lure in limited partners. They’re also looking at private credit. With the explosion of non-bank lending, the SEC is terrified of a "black box" systemic risk where nobody knows who owes what to whom.
Expect examiners to dig into:
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- Valuation: How are you pricing those illiquid assets when the market is wonky?
- Conflicts of Interest: Are you shifting expenses from the GP to the fund without a clear contract?
- Adviser-Led Secondaries: Even though the mandatory "fairness opinion" rule was vacated, examiners are still checking to see if these deals are rigged against the LPs.
The Marketing Rule Pivot
There’s some rare good news for compliance teams. Just recently, on January 16, 2026, the SEC issued fresh guidance on the Marketing Rule. It’s actually helpful. They clarified that advisers have more flexibility when showing performance "net of fees."
In the past, there was this rigid idea that you had to use a "model fee" if your actual fees were lower than what you plan to charge a new investor. Now, the SEC says they’ll look at the "facts and circumstances." Basically, if you can prove your marketing isn't misleading, you have more room to breathe.
They also loosened up on testimonials. You can now pay for endorsements from people who have had past run-ins with regulators (disciplined individuals), provided they weren't actually barred or suspended and you disclose the history. It’s a pragmatic shift that feels a lot more human than the robotic "no-go" zones we’ve seen for the last few years.
What You Should Do Right Now
The landscape is shifting from "What does the law say?" to "How will the SEC interpret my existing contracts?"
Review your Side Letters. Even without the new rules, the SEC is using its exam power to ensure that "preferential treatment" isn't causing a "material negative effect" on other investors. If you’ve given one investor a 24-hour liquidity window and everyone else is locked up for five years, you have a disclosure problem.
Audit your AI disclosures. If your pitch deck mentions "Machine Learning" or "Artificial Intelligence," make sure your compliance manual explains exactly how those tools are supervised. Don't let a marketing buzzword turn into an enforcement action.
Prepare for October 1, 2026. Don't assume Form PF will be delayed forever. Start gathering the data for master-feeder structures and parallel funds now. The "reduced reporting" Chairman Atkins mentioned might apply to smaller firms, but if you’re managing over $1.5 billion, the data requirements are only getting more granular.
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Check your short position reporting. Remember, Rule 13f-2 is live. Your initial filings for gross short positions are due February 17, 2026. This is a hard deadline. The SEC wants to see any position over $10 million or 2.5% of an issuer's shares. Unlike other filings, these remain confidential to the public, but the SEC uses the aggregated data to spot market manipulation.
The era of "regulation by enforcement" isn't over; it's just getting more targeted. Stay ahead of the examiners by being obsessively transparent in your disclosures, even if the Fifth Circuit says you don't have to be.